In many equity markets, January saw a continuation of the progress seen in Q4 2023, with the US, European and Japanese markets seeing positive returns. Indeed, the latter (in local currency terms at least) posted near double digit gains – only the weakening Yen detracting (a weaker currency reducing returns for sterling investors). However, in the case of fixed interest markets, we saw the opposite, as the realisation that perhaps the prospects for a significant number of interest rate reductions weren’t as likely as it seemed late in 2023. This realisation was aided by comments from Central bankers during January, who seemed keen to dampen the markets’ previous enthusiasm.
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Find out more in our February Investment Update.